Media Mentions
Schule partner Dan Oshinsky quoted in 9fin
July 29,2024
Schulte Roth & Zabel partner Dan Oshinsky recently discussed the evolving landscape of collateral loan obligations ("CLOs") with 9fin for their article, "Private credit element brings mid-market closer to BSL CLOs as spread basis narrows." He highlighted how the integration of 'private credit' is bridging the gap between middle-market and broadly syndicated loan ("BSL") CLOs. As an example, traditionally, middle-market CLOs faced stricter limits on covenant-lite ("cov-lite") loans compared to their BSL counterparts. But according to Dan, who specializes in mid-market and private credit CLO deals, the cov-lite basket found in many middle market CLOs has started to increase. “This is especially true for CLOs designed to include the large private credit loans that have become prevalent in the market,” Dan noted. Moreover, an expansion in the investor base for middle-market CLOs has enhanced liquidity for MM CLO investors and also brought spreads closer to the BSL CLO market levels.
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The UK Financial Conduct Authority (“FCA”) has released the final rules on the Payment Optionality for Investment Research in its PS 24/9.[i] The FCA rules refer to this new research payment structure as “joint payments for third-party research and execution services”; in fact, it is based on a commission sharing arrangement (“CSA Option”) combined with detailed procedural and operational safeguards, including budgeting, valuation and client disclosure obligations. Managers who intend to take up the CSA Option will need to ensure the procedural safeguards are appropriately implemented in written compliance policies, CSA agreements or similar, client agreements and periodic client reporting, as appropriate.
Alerts
The UK Financial Conduct Authority (“FCA”) has released the final rules on the Payment Optionality for Investment Research in its PS 24/9.[i] The FCA rules refer to this new research payment structure as “joint payments for third-party research and execution services”; in fact, it is based on a commission sharing arrangement (“CSA Option”) combined with detailed procedural and operational safeguards, including budgeting, valuation and client disclosure obligations. Managers who intend to take up the CSA Option will need to ensure the procedural safeguards are appropriately implemented in written compliance policies, CSA agreements or similar, client agreements and periodic client reporting, as appropriate.